Bill Bonner of "The Daily Reckoning" said it
best on Jan. 6 of this New Year and decade when he posed the
question: "are things really getting better?"

"Well, it's sort of true, "he said. "The
recession is over … the depression continues."

In order to really make a "royal mess of
things, you need taxpayer support" and additional contributions
from the Chinese, willingly for now. "The federal authorities are
busily making a bad situation worse," he quips.

We had some GDP growth in the third quarter of
2009, perhaps courtesy of the "Cash for Clunkers" program, and
those being thrown out of work were down to merely a non-descript
number just above 80,000 in December, keeping the "official"
unemployment figure at 10 percent. However, it was also reported
661,000 people just gave up looking for work, so they are not even
considered in the equation any more.

All this talk about improvements to the bottom
line (whose bottom is anyone's guess) reminds me of an article I
read several years ago while perusing the archives at the Arizona
Historical Society. It was headlined "Depression to end in July,
says Dawes, and proves it!"

Charles G. Dawes was a retired U.S. army
general and banker, as well as having been a former vice president
of the United States, and having survived the panic and following
depressions of 1873 (when he was probably knee-high to a weed) and
1893, felt he had enough background to positively announce, in no
uncertain terms, the 1930s depression was heading to a spectacular
ending and that there would be a "great sustained demand for
durable goods" by the spring or summer of 1935.

He would be proved right, of course, but the
big consumer spending spree would not start until 15 years later,
when those little rascal boomers were still soiling diapers and
long after his death. And this same spending binge would come to a
phenomenal end nearly 60 years later, when the bubbles created by
so much credit would begin to pop, first with the http://dot.com">dot.com and then housing. We still have a few
more bubbles to go before this thing really hits bottom, as it was
in the 1930s, but with an even greater light show since the
population is twice the size it was before World War II and also
due to the government's incredible appetite to run up smoking
mounds of deficits and debt. There are more people on food stamps
today then were living in this country at the time of the Civil War
(1860 census 31,443,321 versus year 2010 when 39 million people
need taxpayer help just to eat).

Dawes believed the Great Depression was about
to end because the populace had gone more than five years without
purchasing new vehicles, appliances, and all kinds of doodads.
Unlike today, the American population was not anywhere near as
debt-laden and the dollar was actually able to purchase much more.
What is so amazing is in 1912, an American with a dollar in their
pocket could still purchase the same amount of goods an American
could while watching the burning of the capital during the War of
1812. A dollar truly was worth its weight in gold. And yet 98 years
later you can barely purchase 3 percent of the same goods with your
dollar; bummer.

The American public has been spending far
beyond its means for so many years our landfills could be mined for
useful products. That is how wasteful we have become, a big
difference between our current economic woes and those in Dawes'
1930s. Even during the boom years of the 1920s, people did not
waste. Today, far too many people think you can tax or confiscate
from those who produce to sustain those who do not. Is there really
enough to go around? Even if we do have a work force of nearly 139
million, how many of them actually pay enough taxes to prop up the
ever-expanding reaches of the government, from local levels to
federal?

The total national assets of this nation come
out to be about $79.3 trillion, yet the total US unfunded
liabilities is now approaching $106.9 trillion (that's Social
Security, Medicare, Medicaid, and Lord knows what else that has
been promised to the American public, not including plans for
national healthcare). That comes out to about $346,571 per citizen.
So there are so many rich people in America that they can carry a
tax load like this? Get ready, middle class, this puppy is coming
your way. And with personal debt approaching $16.7 trillion, there
is not going to be any resurgence in consumer spending anytime
soon. And since this economy is still more than 70 percent
dependent on consumption, where will the recovery actually find a
foothold?

The U.S. national debt on the eve of World War
II was $49 billion, or $718 billion in 2008 dollars. Dawes'
declaration the Depression was going to end in mid-1935 was
probably more realistic than what we are being told today. The
truth is we are more likely to resemble the Japanese economy for
the next couple of decades than the big V-shaped recoveries of past
recessions since WWII; double bummer.